US stock futures flounder amid tech weakness, Fed caution
Investing.com -- Bank of America upgraded Boeing (NYSE:BA) to Buy and raised its price target to $260 a share on Monday, now the highest target on Wall Street, as confidence builds in the aerospace company’s turnaround.
The new target, up sharply from BofA’s previous $185 target, implies free cash flow of $9 per share.
“We once compared Boeing’s performance to a Greek tragedy,” BofA analysts wrote. “But the narrative has changed.”
Citing CEO Kelly Ortberg’s leadership since August, the firm noted that Boeing has made progress addressing “exigent labors,” including resolving a 53-day strike, realigning its portfolio, and implementing new safety systems.
Production stability and Boeing’s emerging role as a key player in U.S. trade deals also factored into the call.
BofA said recent orders from the United Kingdom (TADAWUL:4280), Qatar, UAE, and China are “setting a precedent for future global trade negotiations, to BA’s benefit.”
“We see it feasible for BA to produce 38 737s/mo by 4Q,” BofA wrote, calling Boeing a “favored trade mechanism” under the Trump administration.
Still, risks remain. “Even with all the positive data points, trust between BA and its shareholders, customers and regulatory agencies is extremely fragile,” the firm cautioned.
They note that Boeing must also navigate regulatory hurdles, such as the FAA lifting its 737 production cap, and execute on defense programs.
BofA highlighted Boeing’s efforts to strengthen its balance sheet, including the planned $10.6 billion sale of its Digital Aviation Solutions unit.
“We anticipate more deals,” analysts said, which could help preserve the investment-grade credit rating and free up resources for core operations.